Crime Watch: August 2, 2013

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Former Washington, DC, Accountant Pleads Guilty to Tax Fraud

The Justice Department and IRS announced July 31 that John T. Hoang, of Woodbridge, Virginia, pleaded guilty in federal district court in Washington, DC, to willfully aiding and assisting in the preparation of false income tax returns for tax year 2004.

According to court documents and statements made in court, Hoang was a CPA and an attorney. From January 2005 through April 2007, Hoang operated John T. Hoang CPA, a tax return preparation business and was one of two partners who owned Tax-Smart Technology Services. Hoang operated John T. Hoang CPA and Tax-Smart from various locations in the District of Columbia and Fairfax, Virginia.

In his capacity as a tax return preparer, Hoang prepared and supervised the preparation of client tax returns to be filed with the IRS and various state taxing authorities. For the tax years 2004, 2005, and 2006, Hoang prepared hundreds of Forms 1040 and earned substantial income from his tax preparation activities. Hoang further received, through John T. Hoang CPA and Tax-Smart, a substantial portion of the refunds issued by the IRS to his clients. Despite earning revenue through his businesses of approximately $1 million in 2004, $2 million in 2005, and $3 million in 2006, Hoang failed to file any federal income tax returns or pay any federal income taxes for himself or his businesses.

Hoang admitted that he prepared and caused the preparation of false and fraudulent 2004, 2005, and 2006 Forms 1040 for his clients. When preparing these false Forms 1040 and related schedules for his clients, Hoang created wholly fictitious business income and expenses for what purported to be a technology licensing business. The false information resulted in the client-taxpayers reporting fake losses from the business activity and receiving either larger refunds than they were entitled to or a decrease in the amount of taxes due. Hoang admitted that the tax loss caused by some of the false returns he prepared was greater than $30,000 per return and that he prepared at least twenty-four such false returns for the 2004 through 2006 tax years.

As part of the plea agreement, Hoang admitted that the total tax loss caused by his criminal conduct is greater than $1.5 million. Hoang faces a maximum sentence of six years in prison and a $500,000 fine.

Source: US Department of Justice


Justice Department Shuts Down Indiana Tax Preparer

The Justice Department announced that on July 30, a federal district judge in Indianapolis permanently barred Cynthia Hawk, who operates Gain Tax Services, from preparing federal income tax returns for others. Hawk consented to the entry of this injunction.

The government's complaint alleged that Hawk prepared at least 1,501 returns from 2009 through 2012, and that returns Hawk prepared claimed refunds at an unusually high percentage, ranging from 96 to 99 percent during these years. The government alleged that Hawk failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on customers' income tax returns. Because Hawk failed to comply with these due-diligence requirements, in 2011 she was penalized by the IRS. When the IRS performed a follow-up investigation in 2012, as it routinely does, the complaint alleged that it again found ongoing failures and fraudulent claims by Hawk.

The complaint also alleged that Hawk claimed education credits on her customers' tax returns when the customers did not actually have any qualifying education expenses. Hawk also allegedly falsified customers' income in order to claim the maximum EITC for them.

The complaint alleged that Hawk's repeated conduct of preparing returns that understated her customers' liabilities based on bogus credits or fabricated income or deductions was sufficient for the court to prohibit her from preparing federal tax returns.

Source: US Department of Justice


Self-Proclaimed Leader of Sovereign Citizen Group Sentenced to Federal Prison for Promoting Tax Fraud Scheme

The Justice Department, the IRS, and the FBI announced July 31 that James Timothy Turner, also known as Tim Turner, was sentenced to serve eighteen years in federal prison for conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the IRS, failing to file a 2009 federal income tax return, and falsely testifying under oath in a bankruptcy proceeding.

In March 2013, following a five-day jury trial, Turner was convicted on ten counts in the US District Court for the Middle District of Alabama. Based on the evidence introduced at trial and in court filings, Turner, the self-proclaimed "president" of the sovereign citizen group Republic for the united States of America (RuSA), traveled the country in 2008 and 2009 conducting seminars teaching attendees how to defraud the IRS by preparing and submitting fictitious bonds to the US government in payment of federal taxes, mortgages, and other debt.

The evidence at trial revealed the bonds are fictitious and worthless, but witnesses testified that Turner used special paper, financial terminology, and elaborate borders in an effort to make them look authentic and more likely to succeed in defrauding the recipient. Turner was convicted of sending a $300 million fictitious bond in his own name and of aiding and abetting others in sending fifteen other fictitious bonds to the Treasury Department to pay taxes and other debts.

The evidence at trial also established that Turner taught people how to file retaliatory liens against government officials who interfered with the processing of fictitious bonds. Turner filed a purported $17.6 billion maritime lien in Montgomery County, Alabama, Probate Court against another individual. This investigation began after Turner and three other self-proclaimed "guardian elders" sent demands to all fifty governors in the United States in March 2010 ordering each governor to resign within three days to be replaced by a "sovereign" leader or be "removed." The FBI immediately began investigating Turner and IRS-CI joined the investigation soon thereafter.

In addition to prison time, Turner was ordered to pay $26,021 in restitution to the IRS and to serve a five-year term of supervised release upon his release from prison.

Source: US Department of Justice


Atlanta Man Sentenced for Filing Fraudulent Tax Returns

Frederick Roberts has been sentenced to serve over seven years in federal prison for filing fraudulent federal and state tax returns and for stealing the identities of his victims.

According to US Attorney Yates, the charges and other information presented in court, Roberts prepared fraudulent federal and state income tax returns using stolen identities. He submitted tax returns in other people's names seeking large refunds and had the checks sent to an address where he could retrieve the mail. He cashed the refund checks with unscrupulous check cashers, who were willing to accept the checks even though none of them were in Roberts' name. Roberts sought over $899,000 in refunds between May 2009 and March 2011, and he actually received $866,436.66.

Roberts, of Atlanta, Georgia, was sentenced July 30 to seven years, three months in prison to be followed by three years of supervised release, and he was ordered to pay restitution in the amount of $866,436.66. Roberts was convicted on these charges on March 8, 2013, after he pleaded guilty.

Source: US Attorney's Office - Georgia


Federal Courts Authorize Service of John Doe Summonses Seeking Identities of Persons Using Payment Cards in Norway

The Justice Department announced that federal courts in Minnesota, Texas, Pennsylvania, Oklahoma, Virginia, and California have entered orders over the past week authorizing the IRS to serve "John Doe" summonses on certain US banks and financial institutions, seeking information about persons who have used specific credit or debit cards in Norway. The summonses are referred to as John Doe summonses because the IRS does not know the identity of the person being investigated. While orders have been entered in seven of these cases, the United States' petitions in three additional cases remain pending.

The lawsuits, filed on July 19 and 22, 2013, in nine federal districts, were initiated at the request of the Norwegian government under a treaty between Norway and the United States. The treaty allows the two countries to cooperate in exchanging information that is helpful in enforcing each country's tax laws.

The United States is seeking the identities of persons who have used specific debit or credit cards issued by certain US financial institutions so that Norway can determine if those persons have complied with Norwegian tax laws. A total of eighteen US financial institutions are identified in the government's court filings. The filings do not allege that these financial institutions have violated any US laws with respect to these accounts.

As alleged in court papers filed by the Justice Department, Norwegian authorities have reason to believe, based upon the use of payment cards in Norway that were issued by US banks, that unidentified card holders may have failed to report financial account information or income on their Norwegian tax returns. Court papers cite examples where individuals using non-Norwegian payment cards have claimed to be tax residents of other countries but were found to have resided in Norway for sufficient time to subject them to taxes in Norway.

The lawsuits are a part of ongoing international efforts to stop persons from using foreign financial accounts as a way to evade taxes. Courts have previously approved John Doe summonses allowing the IRS to identify individuals using offshore accounts to evade their US tax obligations. In the present suits, the Justice Department is seeking the identities of persons who may be attempting to hide their Norwegian taxable income in US financial accounts.

Source: US Department of Justice


Two Louisiana Men Indicted for Threatening to Retaliate against a Witness in a Federal Tax Trial

The Justice Department announced July 26 that a federal grand jury in Baton Rouge, Louisiana, returned an indictment charging Anthony Williams and Bobby Riley with conspiring to threaten to retaliate against a witness in a federal trial, threatening to retaliate against a witness in a federal trial, and making false statements to federal agents.

According to the indictment, Williams and Riley, both residents of Baton Rouge, threatened to cause bodily injury to a witness who testified in the federal trial of United States v. Angela Myers. The indictment alleges that Williams and Riley made a threat via Instagram with the intent to retaliate against the witness for his testimony in the Myers trial. In March 2013, Myers was convicted by a jury of twenty-one federal felonies in a stolen identity tax refund fraud prosecution. The indictment also alleges that Williams and Riley made false statements to federal agents in March 2013.

If convicted, Riley and Williams each face a potential maximum sentence of thirty years in federal prison.

Source: US Department of Justice


Illinois Man Indicted for Obstruction of Justice and Filing False Liens against Two Federal Judges and Government Employees

The Justice Department announced July 25 that Tyree Davis Sr. of Flossmoor, Illinois, was arrested on an eight-count indictment charging him with obstruction of justice and filing fraudulent multibillion-dollar liens against government employees. The indictment was returned on July 24 by a federal grand jury in Chicago.

According to the indictment, Davis obstructed justice by sending correspondence threatening to arrest two federal judges: the chief judge of the Northern District of Illinois and the judge who presided over the 2010 tax trial of LaShawn Littrice, whom Davis refers to as his wife. Littrice was convicted by a jury in June 2010 and sentenced to forty-two months in prison in December 2010.

Davis also filed false liens, titled Notice of Maritime Liens, against both judges and notified others that he had filed the liens. In addition to the two judges, Davis filed false liens against the US Attorney and Clerk of Court for the Northern District of Illinois, an Assistant US Attorney, and an IRS - Criminal Investigation special agent. All the liens were publicly filed with the Cook County Recorder's Office and claimed that each individual owed $100 billion. The liens were re-recorded two and three times in order to add property descriptions to them.

If convicted, Davis faces a maximum of eighty years in prison and a maximum fine of $2 million.

Source: US Department of Justice


Charlestown Resident Sentenced for Tax Scheme at Suffolk Downs

A Charlestown, Massachusetts, man was sentenced July 25 for his scheme to help gamblers at Suffolk Downs evade the payment of taxes on over $2 million in winnings.

Gary Boyar was sentenced by US District Judge Richard G. Stearns to one year and one day in prison and ordered to pay $43,149 in restitution to the IRS. In February 2013, Boyar pleaded guilty to corruptly endeavoring to impede the IRS and tax evasion.

Boyar was a "10 percenter", a phrase referring to the 10 percent fee charged by those who cash winning tickets for gamblers so that the gamblers' identities are not reported to the IRS. This scheme allowed gamblers to avoid paying taxes on their winnings, which were taxable income.

When Boyar cashed tickets and submitted forms to the IRS associated with those tickets, he used his deceased father's Social Security number to obstruct the IRS. During the tax years 2004 through 2006, Boyar cashed more than $2 million in tickets at Suffolk Downs that belonged to winning gamblers, and he submitted approximately 1,713 false IRS forms using his deceased father's Social Security number. This conduct obstructed the IRS from determining the identities of the actual winners.

Source: US Attorney's Office - Massachusetts


Tucson Man Sentenced to 135 Months for Defrauding over 1,600 People

On July 23, Anthony Mark Boscarino of Tucson, Arizona, was sentenced by US District Judge Cindy K. Jorgenson to 135 months. Boscarino pleaded guilty January 23 and February 27, 2013, to forty-three crimes, including fraud, money laundering, and tax evasion.

Boscarino was involved in multiple frauds using his Internet sports handicapping site that operated under several names, including Mike's Lock Club. He solicited victims to invest in gambling junkets to Las Vegas, in an oil well project in Louisiana, in collateralized mortgage obligations, and several other scams. He was ordered to pay restitution of $6.5 million to the 1,685 victims of his fraudulent activity and $1.3 million in unpaid taxes for 2009. The court also ordered a $4.8 million money judgment against him and forfeited several of his cars and bank accounts.

Source: US Attorney's Office - Arizona


Three North Miami Residents Charged with Filing Fraudulent Tax Returns and Receiving over $1.8 Million in Fraudulent Refunds

On July 24, US Attorney for the Southern District of Florida, IRS-CI, US Postal Inspection Service, and US Secret Service (USSS) Miami Field Office announced the filing of an indictment charging defendants Gerald Duverger and Jean Louis, both of North Miami, Florida, with filing false, fictitious, and fraudulent claims and with wire fraud. A separate indictment was filed charging Jeaneno Florent, also of North Miami, with filing false, fictitious, and fraudulent claims. Defendants Duverger and Louis were arraigned July 24 federal court in Miami before US Magistrate Judge Barry L. Garber. Defendant Florent will be arraigned at a later date.

Louis is charged with one count and defendants Duverger and Florent are each charged with two counts of filing false, fictitious, and fraudulent claims in violation of Title 18, US Code, Section 287. Defendants Duverger and Louis are each charged with one count of wire fraud, in violation of Title 18, US Code, Section 1343.

According to the charging documents, in 2012, the USSS received information that two large tax refund checks had been paid on tax returns filed by Duverger and Florent. With respect to Duverger, the tax return fraudulently indicated that Duverger made $8 million in wages from Capitol Records, Inc. and was entitled to a refund of approximately $613,043. The Department of Treasury sent the tax refund to a bank account controlled by Duverger.

As further alleged in the charging documents, in January 2013, a tax return was submitted in the name of Louis claiming over $9 million in wages from Warner Bros. Distribution Corporation and seeking a refund of approximately $600,281. On July 3, 2013, the Department of Treasury sent the tax refund of approximately $603,883 to Louis' bank account.

If convicted, the defendants face a possible maximum statutory sentence of five years in prison for each count of filing false, fictitious, and fraudulent claims and twenty years in prison for each count of wire fraud.

Source: US Attorney's Office - Florida


Owner of Local Tax Preparation Franchise Pleads Guilty to Tax Conspiracy Charges

Jimi Clark, the owner of a Mo' Money Tax franchise, admitted to falsely claiming educational tax credits on forty-seven returns. The American Opportunity Credit (AO Credit) allows certain taxpayers with educational expenses to take a refundable credit on their income taxes. He had been scheduled to proceed to trial July 24. 

Clark admitted to overseeing the preparation of tax returns at his franchise, addressed specific questions about returns as they arose, and generally supervised all preparers working in his franchise, including his codefendants, Justin Buford, Leslie Chaney, Ray Reed, and Mary Taylor.

The defendants were trained on educational tax credits, including the AO Credit. Clark abused the AO Credit program at the Mo' Money franchise during the 2009 filing season to attract and keep clients. The office filed at least forty-seven returns with false and inflated AO Credit line items. On the vast majority of the line items on which AO credits were claimed on the false returns, Clark and his preparers claimed exactly $3,765 in qualified education expenses. Out of 494 tax returns prepared for the 2009 tax year at Clark's franchise, more than half, 288 returns, claimed AO credits. On each of the forty-seven returns, the taxpayers did not incur the educational expenses claimed and were, therefore, not entitled to the AO credits. Defendants Chaney, Reed, and Buford went so far as to false claim educational expenses on their personal 2009 returns. The tax loss to the United States on just the forty-seven returns listed in the indictment exceeds $50,000. The tax loss for all 288 returns on which educational credits were claimed for the office in 2009 exceeds $300,000.

Clark pleaded guilty to conspiracy to commit tax fraud and aiding and abetting the preparation of false tax returns. His sentencing is scheduled for November 19, 2013. 

Codefendants Buford, Chaney, Taylor, and Reed previously pled guilty to related charges and await sentencing.

These charges carry maximum penalties up to five years in prison and/or fines up to $250,000. Restitution to the United States is also mandatory.

Source: US Attorney's Office - Missouri


Kentucky Woman Sentenced to Thirty-Nine Months for Identity Theft and Fraud

A Jackson, Kentucky, woman, who previously admitted to stealing someone else's identity to buy a car, was sentenced to thirty-nine months in federal prison.

On July 25, US District Judge Karen Caldwell sentenced Lisa Ann Salyers for wire fraud and aggravated identity theft. Judge Caldwell also ordered that Salyers pay $5,450.50 in restitution to Paul Miller Ford.

Salyers previously admitted she obtained the date of birth and Social Security number of another person through the Internet. She then assumed the identity of this victim and used it to purchase a car from a Lexington car dealership. Salyers also tried to use the victim's identity to buy furniture from a Lexington retailer. Salyers pleaded guilty to these charges in March of 2013.

Under federal law, Salyers must serve at least 85 percent of her prison sentence and will be under the supervision of the US Probation Office for three years following the completion of her prison term.

Source: US Attorney's Office - Kentucky


Northern Kentucky IRS Employee and Florida Man Accused of Stealing Identities, Committing Mail Fraud, and Filing a False Tax Claim

A financial technician, employed in a Boone County, Kentucky, office of the IRS, has been charged with multiple crimes relating to her unauthorized access of an IRS computer, to obtain personal information about taxpayers. 

On July 18, 2013, a federal grand jury returned a sealed indictment against Joy Fox of Independence, Kentucky. The indictment, which was unsealed July 25, charges Fox with eight counts of intentionally exceeding her authorized access to an IRS computer for the purpose of improperly obtaining personal identifying information of taxpayers. She is also charged with three counts of mail fraud and three counts of aggravated identity theft in relation to the mail fraud.

According to the indictment, another individual, Patrick Sharpe of Tallahassee, was charged as a codefendant in the case. Sharpe and Fox allegedly used the personal identifying information of taxpayers to obtain online prepaid debit cards, in taxpayers' names, and then attempted to fund the cards using the taxpayers' Social Security benefits. Once the cards were approved, the defendants caused the cards to be mailed to addresses in Kentucky. Fox and Sharpe are also charged with conspiracy to file a false claim for a tax refund.

The mail fraud charges carry a maximum of twenty years imprisonment; the exceeding authorized access charges carry a maximum of five years imprisonment; the aggravated identity theft charges carry two years imprisonment, which must run consecutively to any other sentence imposed; and the filing a false claim for refund charge carries a maximum of ten years imprisonment. The defendants could also be fined a maximum of $250,000. 

Source: US Attorney's Office - Kentucky



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